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China Woos Caribbean Markets

China is waging an aggressive campaign of seduction in the Caribbean (search), wooing countries away from relationships with rival Taiwan, opening markets for its expanding economy, promising to send tourists, and shipping police to Haiti in the first communist deployment in the Western Hemisphere.

And the United States, China's Cold War (search) enemy, is benignly watching the Asian economic superpower move into its backyard.

For decades China and Taiwan used dollar diplomacy to win over small Caribbean nations where small projects building roads, bridges, wells and fisheries go a long way.

But Beijing's growing economic clout is tipping the scales in the region. Caribbean trade with China reached $2 billion last year, a 42.5 percent increase from 2003, the Chinese news agency Xinhua reported.

The United States has applauded China's economic offensive, seeing it as a herald of political reform.

"China's intensified interest in the Western Hemisphere does not imply a lack of focus by the United States," Roger Noriega, the U.S. assistant secretary for Western Hemisphere affairs, said in a recent letter to the editor of New Jersey's Newark Star Ledger (search). "The United States has long stood for expansion of global trade and consolidating democracy."

This year, two Caribbean countries -- Dominica and Grenada -- switched allegiance to China, abandoning Taiwan, which China calls "a renegade province."

Though democratic Taiwan is self-governing, communist Beijing insists the island is part of China. The two sides split amid civil war in 1949 and Beijing has since refused to have ties with any government that recognizes Taiwan.

"Democratic, market-oriented Taiwan is a thorn in its side," said Steve Johnson, senior policy analyst at the conservative Washington, D.C.-based Heritage Foundation.

Two weeks before Dominica changed sides, Taiwan gave it $9 million. China promised Dominica $112 million over the next six years.

"China is not only increasing its influence in the Caribbean, the region is opening up to China, realizing that Taiwan's money diplomacy is not working anymore," said Guyana's Foreign Minister Clement Rohee.

The Bahamas was one of the first in the region to abandon Taiwan, in 1997. The move came as Hutchisom Whampoa, a Beijing-allied Hong Kong company, opened a $114 million container port in Freeport and bought three hotel resorts in Nassau. Since then, China has earmarked more than $1 billion for projects ranging from maritime transport to a sports complex.

Grenada's Prime Minister Keith Mitchell said he expects future Chinese aid will be significant.

Early this month, Chinese Vice President Zeng Qinghong visited Jamaica for a three-day China-Caribbean economic and trade forum attended by hundreds of Chinese and Caribbean government officials and business executives.

Robert Stephens, chairman of Jamaica's Fair Trade Commission and senior vice president of the Jamaican Port Authority, looks forward to future deals.

"The Chinese would distribute goods throughout the Caribbean. Any increase in business would benefit Jamaica as a logistic distribution hub," he said.

By the end of the forum, China added Antigua, the Bahamas, Barbados, Dominica, Jamaica, and St. Lucia to its approved travel destinations, promising the region a bigger piece of the fast-growing Chinese tourist market.

Caribbean governments had sought the approved status to boost a tourism industry hard hit by the Sept. 11 terror attacks in the United States.

"Basically, it's the tourist trade that interests China," Johnson said. "I think they will try to invest in their own hotels and in maritime activities" while "consolidating their access to energy" in oil-producing Trinidad.

Qinghong this month led a delegation of 120 to Trinidad and visited its Pitch Lake, which produces asphalt used to pave many Chinese highways and the runways at Beijing International Airport. China, already the leading importer of Trinidadian asphalt, is a good prospect for even more business as Beijing develops infrastructure for the 2008 Olympic Games and World Expo 2010, a Chinese government statement said.

In the Caribbean, only five countries still maintain relations with Taiwan -- the Dominican Republic, Haiti, St. Kitts and Nevis, and St. Vincent and the Grenadines.

But China has commercial missions in the Dominican Republic and in Haiti, where in October China dispatched 95 police officers to join a U.N. peacekeeping force. It is Beijing's first contribution to a U.N. mission in the Western Hemisphere.

The United States and China once were mortal enemies.

When China became communist in 1949, the United States supported Taiwan, the island where the former Chinese government had taken refuge. U.S. troops fought Chinese soldiers during the 1950-53 Korean War.

But in 1971 the United Nations gave Beijing the China seat and Taiwan was expelled. In 1979, the United States recognized China's legitimacy. In 2001, China entered the World Trade Organization and foreign investment in China shot to $153.5 billion last year, up 33 percent from 2003.

Last year, China's share of global output was 13 percent ---- more than that of Canada and almost twice that of Japan.

U.S. exports to China have grown more rapidly than to any other country with cumulative investment there reaching $35 billion, according to the State Department. Among leading U.S. businesses there, Wal-Mart sales in China totaled $707 million in 2003.

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